ALJDEC

94F-RF226-ROC · Registrar of Contractors · 2002-01-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 17, 2002 at 9:00 a.m. APPEARANCES: Plaintiffs Watson did not appear; Plaintiffs Hughes did not appear; Defendant Kenyon Tile, Inc. did not appear; the Arizona Registrar of Contractors appeared through Victoria J. Martin, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The Registrar of Contractors presented evidence and legal authority to establish that Norman Kent Clark is responsible for payments made to Plaintiffs from the Residential Contractors’ Recovery Fund to compensate them for damages caused by Kenyon Tile, Inc. The Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT On July 12, 1991, the Registrar issued License No. 090391, Class C-08, to Kenyon Tile Inc., a corporation. The license application listed Norman Kent Clark, 2430 W. Pampa Cir., Mesa, AZ 85202, as qualifying party. Mr. Clark signed the application on May 30, 1991. On December 13, 1993, the Registrar revoked License No. 090391, Class C-08, as a result of the Registrar’s final order against Kenyon Tile Inc. in Case No. M94-0035. On March 15, 1994, the Registrar adopted Administrative Law Judge Robert I. Worth’s recommended order in Case No. 94/226, Ed and Shirley Watson v. Kenyon Tile Inc., that awarded “payment . . . from the Contractors’ Recovery Fund . . . in the amount of $5,110.91.” The Registrar’s Order was sent via certified mail to Kenyon Tile at 3430 W. Pampa Circle, Mesa, AZ 85202-7854. The Fund made payment to Mr. and Mrs. Watson in Warrant No. 21 1035651, dated April 8, 1994, in the amount of $5,110.91. On September 9, 1994, the Registrar adopted Administrative Law Judge Mark Silver’s recommended order in Case No. 94/401, Larry and Sue Hughes v. Kenyon Tile Inc., that awarded “payment . . . from the Contractors’ Recovery Fund . . . in the amount of $1,832.12.” The Registrar’s Order was sent via certified mail to Kenyon Tile at 3430 W. Pampa Circle, Mesa, AZ 85202-7854. The Fund made payment to Mr. and Mrs. Watson in Warrant No. 21 1386312, dated October 7, 1994, in the amount of $1,832.12. Both payouts in Case Nos. 94/226 and 94/401 were deemed uncollectable. The conduct by Kenyon Tile Inc. giving rise to the payouts occurred on or about April 30, 1993 in Case No. RF94/226 and June 7, 1993 in Case No. RF 94/401. With interest, the amounts owed on both claims on July 16, 2001 totalled $10,217.60. On July 18, 2001, the Registrar rejected Mr. Clark’s Pending application No. P166760 because Mr. Clark, a person named on Kenyon Tile Inc.’s License No. 090391, Class C-08, had failed to reimburse the Recovery fund for the payouts made in Case Nos. 94/226 and 94/401. Mr. Clark requested that the Registrar schedule a hearing, at which he could offer evidence to establish that he had disassociated himself from Kenyon Tile Inc., which Mr. Clark described in a letter to the Registrar dated July 23, 2001: On January 1, 1993, I was contacted by Martin Tile in the State of Nevada offering me immediate employment. Since Kenyon Tile had no activity at that time, I agreed to relocate; I informed Bill Kenyon [its president] of my decision. At that time I drafted a notice of disassociation with Kenyon Tile as their qualifying party, placed it in an envelope and placed in the outgoing mail basket. Mr. Kenyon assured me that it would be mailed the next day along with Kenyon Tile’s notification of my disassociation to the Registrar.

This was the same procedure I followed when I left another company called New Era Interiors, and since I had no problem then, there was no reason to believe there would be one with Kenyon Tile.

Attacked [sic] are copies of paperwork to verify I was not in the employ of Kenyon Tile in 1993. I hope this will help clarify my situation:

ITEM #1 Gas receipts showing arrival in Nevada on 1/2/93.

ITEM #2 Las Vegas police report on the theft of my vehicle on 3/25/93.

ITEM #3 Insurance affidavit filed re: the theft.

ITEM #4 Bill of sale for van purchased in Nevada on 4/26/93.

ITEM #5 DMV title transfer of van dated 4/27/93.

ITEM #6 Emissions test copy for van dated 4/28/93.

ITEM #7 1: W-2 from Martin Tile in Nevada 2: 1099 from Contract Floorworks for the latter part of 1993 in Arizona.

ITEM #8 1993 tax return showing all income sources.

Personnel at the Registrar’s office searched its records, but could not find any evidence that the Registrar had received the alleged notice or otherwise been notified of Mr. Clark’s disassociation from Kenyon Tile Inc.

The Registrar consolidated Case Nos. 94/226 and 94/401 and, on October 22, 2001, referred the matter to the Office of Administrative Hearings and issued an Order to Show Cause. On November 7, 2001, the Registrar issued a Notice of Hearing, setting a hearing on the Order to Show Cause on January 17, 2002 at 9:00 a.m. The Registrar sent the Notice of Hearing via certified mail to Kenyon Tile Inc. at 2430 W. Pampa Circle, Mesa, AZ 85202-7854, which was still the address of record, and at 12235 N. Pinto Drive, Maricopa AZ 85239, apparently the address Mr. Clark provided. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Mr. Clark additional travel time, he neither appeared, personally or through an attorney, contacted the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed, nor presented any evidence to show cause why he should not be held responsible for the Recovery Fund payouts made in Case Nos. 94/226 and 94/401. CONCLUSIONS OF LAW Mr. Clark does not dispute that he was listed on Kenyon Tile Inc.’s contractor’s license when the Registrar issued it. The Registrar’s orders have become final and the payouts have been made in Case Nos. 94/226 and 94/401. Mr. Clark therefore bears the burden of proof to establish that he is not responsible for these payouts by a preponderance of the evidence.[1] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[2] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[3] “Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license . . . until the amount paid from the fund is repaid as provided in this subsection.”[4] “If a person who qualified for a license ceases for any reason whatsoever to be connected with the licensee, both the licensee and the qualifying party shall notify the registrar in writing within fifteen days after such disassociation.”[5] The evidence shows that neither Kenyon Tile Inc. nor Mr. Clark informed the Registrar in writing that Mr. Clark had disassociated himself as Kenyon Tile Inc.’s qualifying party. Applicable statute did not allow Mr. Clark to delegate this statutory responsibility to Kenyon Tile Inc.[6] RECOMMENDED ORDER In view of the foregoing, it is recommended that the Registrar of Contractors affirm its finding that Norman Kent Clark, the qualifying party on License No. 090391, Class C-08 of Kenyon Tile Inc., is responsible for the Recovery Fund payouts in Case Nos. 94/226 and 94/401, with interest from the date of payment. Done this day, January 25, 2002.

_____________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of January, 2002 to:

Registrar of Contractors Michael P. Goldwater, Director ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________ ----------------------- [1] See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996).

[2] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[3] Black’s Law Dictionary at page 1064 (6th ed. 1990).

[4] A.R.S. § 32-1139.B.

[5] A.R.S. § 32-1167.A.

[6] The reason for the non-delegable nature of the responsibility is that, if Mr. Clark had personally mailed and/or confirmed the Registrar’s receipt of the notice of disassociation, the Registrar would have suspended Kenyon Tile Inc.’s contractor’s license for lack of a qualifying party. See A.R.S. § 32-1122.B.1.e. Kenyon Tile Inc. could not have continued doing contracting business as a licensed contractor without Mr. Clark or another qualifying party. Even if Mr. Clark was working in Nevada when the Hughes and the Watsons were injured by Kenyon Tile Inc., therefore, he responsible under applicable statute for the injury.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826